Beneficiary IRA FAQs

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What are the eligibility requirements for Beneficiary IRA?

Must be the beneficiary of an IRA or qualified retirement plan

Generally, spouse beneficiaries can roll over assets into an IRA of their own, or a Beneficiary IRA. If funds are rolled into a Beneficiary IRA, a spouse beneficiary may need to begin taking annual required minimum distributions, depending on their age and the age of the original account holder.

Generally, non-spouse beneficiaries, trusts, and estates may roll over assets into a Beneficiary IRA. Annual required minimum distributions will need to be taken, or the account closed by the end of the 5th year following the original account holder’s death.

Withdrawal options for beneficiaries can be complex. Call the Beneficiary Services team at 1-888-402-0653 for assistance.

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Do all of the inherited funds need to be withdrawn by the beneficiary?

An individual does not have to withdraw all of the funds immediately. After the assets have been transferred to a Beneficiary IRA, the beneficiary has multiple options. One option is to withdraw a certain amount of money each year, based on life expectancy. An individual has until December 31st of the year following the death of the original IRA owner to start taking distributions. Another option is to forgo annual distributions, but withdraw all funds within five years. Use the Inherited IRA tool to see guidelines for withdrawal and determine the amount of any annual withdrawals.

The fund's prospectus contains its investment objectives, risks, charges, expenses and other important information and should be read and considered carefully before investing. For a current prospectus, visit www.etrade.com/mutualfunds or visit the Exchange-Traded Funds Center at www.etrade.com/etf.

Before deciding how to proceed with an inherited IRA, an investor should consider various factors including, but not limited to, age, account type, and relationship of the account holder to the beneficiary. View the FINRA Investor Alert for additional information.

E*TRADE credits and offers may be subject to US withholding taxes and reporting at retail value. Taxes related to these credits and offers are the customer's responsibility. Cash credits for Individual Retirement Accounts are treated as earnings for tax purposes.

IRA accounts are eligible for cash management features, such as free debit card, checking, and Bill Pay, if you’re over age 59½ and upon conversion to the E*TRADE Complete™ IRA account. CT and MI residents are ineligible for E*TRADE Complete™ IRA account.

Commissions for stocks and options trades are $6.95 with a $0.75 fee per options contract. To qualify for $4.95 commissions for stocks and options trades and a $0.50 fee per options contract, you must execute at least 30 stocks or options trades per quarter. To continue receiving $4.95 stocks and options trades and a $0.50 fee per options contract, you must execute at least 30 stocks or options trades by the end of the following quarter. Regulatory and exchange fees may apply.

You can buy and sell ETFs available through the E*TRADE Commission-Free ETF Program without paying brokerage commissions. For margin customers, certain ETFs purchased through the program are not margin eligible for 30 days from the purchase date. To discourage short-term trading, E*TRADE may charge a short-term trading fee on sales of participating ETFs held less than 30 days. E*TRADE has contracted with certain ETF companies to receive compensation in connection with the purchase of ETFs offered commission-free through E*TRADE. This additional compensation received as a result of these relationships is paid based on initial setup fees, and a percentage of invested assets ranging from 0 to 0.15% per annum, depending on the fund company.

You can invest in the mutual funds available through E*TRADE’s no-load, no-transaction-fee program without paying loads, transaction fees, or commissions. To discourage short-term trading, E*TRADE will charge an Early Redemption Fee of $49.99 on redemptions or exchanges of certain no-load, no-transaction-fee funds that are held for less than 90 days. Direxion (other than the Indexed Commodity Strategy Fund DXCTX), ProFunds, and Rydex mutual funds, and all money market funds, are not subject to the Early Redemption Fee.

A distribution from a Roth IRA is federally tax-free and penalty-free provided that the five-year aging requirement has been satisfied and one of the following conditions is met: age 59½, suffer a disability, or qualified first time home purchase.

Securities, investment advisory, commodity futures, options on futures and other non-deposit investment products and services are not insured by the FDIC, are not deposits or obligations of, or guaranteed by, E*TRADE Bank or E*TRADE Savings Bank, and are subject to investment risk, including possible loss of the principal amount invested.

System response and account access times may vary due to a variety of factors, including trading volumes, market conditions, system performance, and other factors.